Oil industry may be key to solving lithium shortage

Earlier this year, Tesla executives warned that the world may soon be facing a critical shortage of minerals and metals needed to build batteries, in particular nickel, copper and lithium. Cobalt is also going to be a growing problem not only because of scarcity, but because it seems the only place it can be mined in abundance is through the help of child labour in the Democratic Republic of Congo.

If the great transition to renewables is to take place, the world needs to find and develop better sources of these key battery components. When it comes to lithium, Alberta oilfields may hold the answer.

When I was a kid I was obsessed with a daily show that talked about all the interesting new inventions that were going to transform the world. I remember one episode where they reported that we would soon see producers growing watermelons in square containers because they would be easier to transport, spoil less and be easier to slice. I have long since given up trying to carve an oblong watermelon. But, sadly, the square version never materialized. It has always reminded me that great inventions don’t always see the light of day.

That said, I maintain great enthusiasm for potentially transformative inventions. And the science, as well as the economics, appears to be on the side of an Alberta company called E3 Metals. If successful, they will not only create a new industry for Alberta, but they will develop vast new sources of lithium in an environmentally sustainable way, help solve our abandoned well problem and get our oilfield service workers back to work.

Around the time Tesla was lamenting lithium shortages, E3 Metals announced it has successfully produced lithium hydroxide from Alberta brine using a patented ion-exchange lithium extraction technology to produce lithium concentrate. This is a major breakthrough. Traditionally, there have been two main ways that lithium has been sourced: hard rock mining and evaporation of brine water with very high concentrations of lithium, mostly found in Chile, Argentina and Bolivia.

Demand for lithium has surged since 2010, owing to an increase in both cellphone and vehicle batteries, and the value has more than tripled, from about US$5,180 per tonne to about US$16,000 today.

That has spurred innovation. I spoke to E3 Metal’s president, Chris Doornbos, a petroleum geologist, who said his company’s new approach, developed in collaboration with the University of Alberta, even offers cost advantages over traditional methods. He said his process is better than hard rock mining because it is as much as US$3,000 per tonne less expensive, and better than evaporation because it allows them to isolate lithium and return other minerals (such as magnesium, calcium, sodium and potassium) to the brine.

Fittingly, E3 Metals is going to begin with the wells in the Leduc reservoir, the find that got Alberta started in the oil business. It is 95-percent brine water, and contains billions of cubic litres, which is enriched with lithium at a depth of 2,500 metres.

Even better, it turns out the process to get at the lithium-enriched brine is exactly the same as it is to drill a well for oil. Alberta already has a well-trained workforce that is accustomed to doing exactly this type of work. Just like traditional oil production, there will be multiple wells operating at the same time, treating the brine at a lithium production facility and then reinjecting the leftover brine back into the reservoir.

Best of all is the potential to help us solve our dormant and abandoned well problem. Currently suspended wells are listed on the books of energy companies as environmental liabilities. If they can be given new life producing lithium, it will convert these liabilities into assets, and create a new long-term revenue stream that will help with the eventual cost of cleanup.

Plus, reusing existing pads will reduce the environmental impact of developing greenfields and allow landowners to continue receiving annual surface lease payments.

Plus, using existing pipelines will bring new life into the linear assessment value and offer a renewed, stable source of funding for struggling municipalities. The expertise we honed in our traditional energy sector has given us the advantage to be major players in the emerging field of battery technology. Isn’t that ironic?